Previewing This Week's Key Macro Events

Goldman summarizes what to look forward to in the next few days, when once again fundamental will be ignored and all attention will be on the ECB.

The Week ahead will be dominated by global PMI and US labour market data as the two key releases. A few central banks meetings are on schedule, but market consensus suggests clearly that that ECB will not change its policy, while the RBA will likely cut interest rates by 25bp. There are also central bank meetings in Columbia, Thailand and the Czech Republic.

The impact of these events on the FX markets, in particular the key activity data, will mainly be driven by the usual risk-on/risk-off mechanics. Moreover, with cyclical data generally weakening, chances are that risk-off currencies could perform relatively better this week. Some additional Yen strength is therefore possible, as well some under-performance of pro-cyclical currencies. The AUD may be worth some particular attention with the RBA meeting this week and the Chinese PMI - both key drivers of the currency.

--- Monday, 30 April ---

US Chicago Purchasing Managers’ Index (Apr): We expect 60.0, compared to consensus at 60.5, and the last reading at 62.2.

German Retail Sales (Mar): Though the exact release day is not confirmed yet, after a negative reading of -1.1% mom consensus expects a rebound to +1.0%.

Turkey Trade Balance (Mar): After a surprise improvement at the last release, consensus expects renewed deterioration in the trade deficit to -$7.2bn from -$5.9bn.

Korea Trade Balance (Apr): As always, the Korean trade numbers will be the first global macro release for the full month that is not based on survey data. Consensus expects continued weakness in exports (-1.5% yoy after -1.4% yoy).

Swiss Manufacturing PMI (Apr): Consensus expects 53.6 after 53.1.

Indonesia CPI (Apr): Consensus expects 4.46% yoy after 3.97%.

Australia RBA Policy Meeting: We and consensus expect the RBA to cut rates in response to a string of weaker domestic macro data in Australia recently.

UK PMI Manufacturing (Apr): Consensus expects a small decline to 51.5 after 52.1.

Global PMIs from BRICs, the Eurozone and others (Apr): With cyclical momentum weakening at the margin in the major economies, the latest round of PMI data will be key. The Flash PMI for the Eurozone released earlier was quite weak on balance already. Key will be the reading in the HSBC PMI for China, where the evidence of monetary easing in March may have supported activity.

Global Services PMIs (Apr): Similar to the manufacturing PMIs, the balance of risk is probably skewed towards slightly weaker readings in global non-manufacturing PMI releases. For a number of countries the non-manufacturing surveys are only due on Friday.

Turkey CPI (Apr): We forecast headline CPI to come in at 1.1% mom, slightly below the 1.3% consensus. This would bring annual CPI to 10.7% yoy, up from 10.4% in March. This month's headline CPI will be distorted by the recent gas and electricity price hikes. However, the underlying core inflation momentum should remain relatively benign, owing primarily to recent TRY appreciation.

ECB Policy Meeting: We expect the main refi rate to be left unchanged at 1.0%. We don’t expect any hint of additional non- standard measures, not least because of the recent stabilisation in bank lending data.

US Initial Jobless Claims: Consensus expects a moderate improvement to 380,000 after 388,000 in the previous week.

Turkish Consumer Prices (Apr): We forecast headline CPI to come in at 1.1% mom, slightly below the 1.3% consensus. This would bring annual CPI to 10.7% yoy, up from 10.4% in March.

Brazil Industrial Production (Mar): In yoy terms, IP is likely to have firmed to a still very subdued 1.5% yoy in March (consensus +0.9% yoy) from -3.9% yoy in February. The industrial sector is expected to post a modest recovery in the months ahead, helped by fiscal stimulus to selected sectors, a number of trade protectionist measures, and the depreciation of the BRL.

Also Interesting: Czech Monetary Policy Meeting.

--- Friday, 4 May ---

Nonfarm Payrolls (Apr): We forecast that nonfarm payroll employment increased by only 125,000 in April (consensus +165,000; last: +120,000), given higher initial jobless claims and likely weather “payback.” We expect the unemployment rate to remain unchanged at 8.2%, similar to consensus.